Islamic finance applies time series analysis to financial data. A time series is a set of observations taken at specific times, usually at equal intervals. Examples of time series are the gross domestic product of a nation observed over a number of years; the price of a stock observed at an interval of five minutes; and the exchange rate of a currency observed each hour, or each day. The interval of time at which a variable is observed is called the *frequency* of the variable. If the variable is observed very frequently such as every month, day, hour, or five-minutes, it is called *high-frequency* variable. In contrast, if it is observed at long intervals such as every year or every five years it is called *low-frequency* variable. Mathematically, a time series is defined by the values of a variable (e.g., closing price of a share, volume of traded shares, gold price) at times Thus, is a variable indexed on time and is represented as: .

A time series involving ...

Start Free Trial

No credit card required